The Taiwanese middle class has experienced two waves of crisis over the past three decades in the context of a colonization transition involving globalization and democratization as primary catalysts. On the economic front, Taiwan’s economy has become increasingly integrated into the Chinese market, resulting approximately one million of the Taiwanese middle class relocating to China. Moreover, neoliberal economic reforms have led to a downsized state sector of the Taiwanese economy. These economic changes affect the growth and stability of the Taiwanese middle class. Meanwhile, on the political front, an ongoing democratic consolidation and decolonization efforts have brought about significant political changes in Taiwan that have deepened Taiwanese nationalism. While economic and political processes appear to be opposite, however, in reality they have been mutually reinforcing, causing increasingly differentiated middle class. The political economy dynamics conditioned in a colonial context suggest that the swing voters of a differentiated middle class play a pivotal role in determining electoral outcomes, and electoral outcomes reshape the differentiated middle class.